Lump-Sum Liquidation

Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 7:5:4 ratio. The partnerships current balance sheet is as follows:

Cash	$6,000		Accounts payable	$60,000
Receivables	25,000		Loan payableKenney	10,000
Loan receivableCho	15,000		CapitalCho	27,000
Rental equipment, net	140,000		CapitalKenney	28,000
			CapitalMartinez	61,000
Total assets	$186,000		Total liabilities and capital	$186,000

Another student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the equipment and $12,000 for the receivables is accepted. After receipt of the $117,000, the liabilities are paid and the partnership is liquidated.

Required

How much does each partner receive?

Cash Distribution
Cho	Answer
Kenney	Answer
Martinez	Answer